If we let P equal the price level expressed as an index number and D equal the value of the dollar, then we can say that:
A)P = D - 1.
B)D = 1/P.
C)1 = D/P.
D)D = P - 1.

Question

Quizplus · Accepted Answer

The value of the dollar (D) is inversely proportional to the price level expressed as an index number (P), meaning that as P increases, D decreases. This is represented mathematically by D = 1/P.

If We Let P Equal the Price Level Expressed as an Index